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otgsoftware.com
As printed in Techgazette, January 1999
Raising His Sights
OTG Software Entrepreneur Richard Kay Was Quick to Spot Opportunity Beyond the Windows© Horizon
Even in a high-tech community that is rife with overnight success stories, OTG Software stands out as turbo-charged. Founded in 1992, the privately held, Bethesda-based software firm is riding an annual revenue growth wave of better than 60 percent, with a headcount that has doubled over the past year alone. The secret to OTG?s success? Rock-solid products and leadership with a vision.
Although hindsight may be 20/20, it?s foresight that counts in an industry where fortunes are literally made or lost by banking on a given technology. This was especially true back in 1992, when Windows was gaining significant market presence and steadily displacing older operating platforms across a range of commercial applications. Kay, then involved in the long-distance business, learned of a team of software developers poised to retool a data storage and document management product suite from IBM?s OS/2 to the new Microsoft platform. The project had foundered in a fiscal crisis and was in danger of cancellation, when Kay elected to take on the team and personally fund the project to completion. The resulting entity was called the Optical Technology Group, so named for the growing popularity of optical storage media such as laser disks.
Not long after the debut of OTG, word of a next-generation Windows platform, dubbed "NT" for New Technology, began leaking out of Redmond, Washington. Kay?s team was selected to develop a mass storage application on this NT platform for Microsoft?s in-house use, thereby granting OTG access to the evolving NT beta code and a chance to blaze a new trail in the burgeoning data storage and document management technologies. The project was a success, completed nearly six months ahead of schedule and to the satisfaction of Microsoft.
Uncharted Waters
Kay then found himself at a crossroads: pursue similar contract projects, or take the gamble on NT and turn his team towards developing and expanding a full suite of storage and document management solutions built on the new platform? "NT wasn?t even in beta yet," remarks Kay, "so there was this great unknown element to the situation. But my team was impressed with what they saw of NT, and Microsoft doesn?t do anything halfway, so I had this sense that both the ?push? and the ?pull? of NT were going to come."
Within a year, it was clear that Kay?s hunch was right. Since 1995, Windows NT has steadily increased penetration of the Fortune 500, U.S. and state and local governments, and academic institutions. Shipment of NT servers has doubled each year, while sales of UNIX-based systems have been sluggish. And while the playing field for document imaging, management, and data storage systems is now littered with competitors, OTG?s early start in the NT arena has clearly established it as a preeminent player in that market space ? a fact that led to a number of early, advantageous OEM arrangements with industry giants such as Hewlett Packard, FileNet, StorageTek, and Data General.
Another key decision was to develop a value-added national distribution channel rather than sink critical R & D dollars into a direct sales organization. "We quickly hooked ourselves up with VARs who were very strong in key vertical markets," says Kay. "They provided the instant expertise and credibility to get our products into the field and build a pipeline for the new products we were turning out." The only downside to this approach is one that has already been corrected. "For many years, we were regarded as the industry?s ?techo-dweebs? without any marketing," Kay says. "But in fact, that was a conscious decision, to plug the money back into building the most solid, reliable technology for the NT environment. No one could accuse us of being more ?style than substance.? It was the right decision, made at the right time," he says.
However, times also change, and Kay notes that in 1998 the company made a substantial commitment to product marketing and positioning, culminating in the debut of the XTENDERSOLUTIONS? brand name for the firm?s growing suite of products. Kay hopes the increased emphasis on marketing initiatives will help fuel the products? penetration of major commercial accounts. Already, the company counts prestigious organizations such as Marathon Oil, Gillette, and Legg Mason among its growing user base.
"We haven?t even reached the peak of NT penetration yet," says Kay. "The federal government is continuing to adopt it at a record rate, and research also highlights the international marketplace, which is in many cases leap-frogging old technology to go directly to the most advanced Windows platforms." Kay points out that the latest news out of Redmond also augurs well: "Microsoft says it will refine and segment the NT marketplace into four different categories, with ?Windows 2000? servers tailored to each. This means new opportunity for OTG as well, to target our products even more precisely to the customers we serve," he says.
60% Growth
Established player in the NT market space
OEM
Arrangements
Hewlett Packard
Filenet
StorageTek
Data General
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